Fulbright U.S. Education Center

As reported by the Joongang Daily today, the government of President Lee Myung Bak, through the Ministry of Education, Science and Technology and the ruling Grand National Party, are set to release a “Road Map to Ease Private Education Costs” by the end of July.   This is the latest salvo in a perennial political battle to curb the influence of private institutes or “hagwons” in Korean education.  Reportedly the proposal will ban cram schools for elementary school children after 9:00 P.M. and for middle and high school students after 10:00 P.M.

At a meeting with ministers on June 23rd, President Lee reportedly said that “Getting rid of private education is crucial for reducing the financial burden on lower income households, but it seems hagwons have a strong lobbying capacity.”  Although Korea is expected to post negative economic growth this year, spending on private education, including hagwons and tutoring, rose to 20.9 trillion won ($16.4 billion) from 20.4 trillion won a year earlier.

An online tutoring service started in the year 2000 was founded by a former tutor at a private education institute.  His inspiration for the company came while watching a home-shopping channel on television and he intended to help reduce the education inequality that is produced when nearly eight in ten students supplement public education with study in private cram schools, or hagwons.  As noted in a New York Times article by Choe Sang-Hun, Megastudy.net, the online tutoring service Mr. Son Joo-eun started, may be the perfect convergence of South Korean’s dual obsessions with educational credentials and the internet.  By tapping into those concerns, which increase during a recession, Megastudy has become South Korea’s fastest growing technology company, with sales expected to grow 22.5 percent this year to 245 billion won ($195 million) even as the country’s economy is expected to contract.

Online commercial services like Megastudy charge a relatively small fee, averaging 40,000 to 50,000 won ($30 to $40) for each course a student selects from thousands of online tutorials.   Megastudy competes with the government sponsored EBS, which offers similar tutorials for free.    However, it hires teachers with followings that rival those of pop stars.  Last year one Megastudy teacher generated 10 billion won (nearly $8 million) and pocketed 23 percent as his share.

With the country pouring billions of dollars into making the internet ten times faster by 2014, Mr. Son suggested that the world turn to South Korea for a glimpse of what education might look like in the future.  ”Offline schools will become supplemental to online education,” he predicted.  ”Students will go to school, perhaps once a week, for group activities like sports.”

The heavy reliance of South Korean students on private educational institutes to supplement what they learn in public schools is a major news item these days.  As reported in the Joongang Daily, “The Education Ministry and lawmakers from the ruling Grand National Party yesterday agreed to withdraw the proposal by a high-ranking Blue House official to prohibit private education institutes, or hagwon, from having classes after 10 p.m., ending a month-long controversy. ”

However, the same meeting to resolve the matter also produced a range of reform measures on the admissions system for foreign language and science high schools, as part of the government’s agenda to battle private-education fever.   This remains a major issue in South Korea’s education sector.

An article in The Korea Herald today provides some useful detail on the increase in spending on private education in South Korea.  Government data showed yesterday that the gap in private education spending between the wealthy and the poor widened last year, raising fears that the economic slump may hit children of low-income families more severely.

According to data by the Bank of Korea and the National Statistical Office, the top 20 percent households in terms of income spent 6.9 times more on private education than the bottom 20 percent in 2008, up from 5.9 times a year earlier. The corresponding figure has continuously risen from 5.3 in 2003, except for the year 2006 with 6.6.

By region, monthly expenditure per student in Seoul was 2.4 times larger than that in smaller towns, or Myeons and Eups, in 2008, up 2.3 times in 2007, the NSO said.

Although the government has been putting ever more emphasis on English education in public schools, spending for private English education rose by the most in terms of subject.

The private education spending for English rose by 11.8 percent, while that of other subjects, like Korean essay writing, fell by 10 percent, the NSO survey showed.

Educational attainment was also a significant factor in deciding the amount of private education spending. Mothers with degrees from graduate schools spent 398,000 won a month on private education in 2008, whereas those with high school degrees spent half of that, or 201,000 won, the survey showed.

According to a report in the Korea Times, spending on private tutoring in South Korea topped US $14 billion in 2008.  This amounted to a 7.6 percent increase from the previous year.   Spending on private education has been rising sharply since 2001 when it stood at 8.11 trillion won. In 2003, the figure exceeded the 10 trillion won mark before growing to 12.86 trillion won in 2004 and 13.75 trillion won in 2005. The spending rose to 15.65 trillion won in 2006.

This is just the latest evidence that Korean parents continue to sacrifice greatly for their children’s education.

Happy New Year (of the Ox)!   This blog is still alive and well, and we’ll be posting information more regularly from now on.  Yesterday, the Seoul Metropolitan Office of Education announced that Seoul’s public elementary, middle and high school English classes will all be taught in English, starting in 2012.  This move, which has sparked considerable public discussion and even controversy over the past year will be implemented under the newly-announced School Managed Innovation of Learning English, or “SMILE” program.  An article in The Joongang Daily reports that the Office of Education plans to upgrade English education by

• offering English immersion classes,
• holding training sessions for Korean English teachers, AND
• recuiting more native-English speaking teachers.

The office hopes these moves will allow students to become fluent in English through classes at public schools, cutting the amount of money spent on private instruction.

We’ll have more to say on this important topic throughout the year.  In the meantime, I want to thank those of you who have sent in positive comments regarding this blog.  We are considering whether to make the effort to translate it into Korean for the benefit of parents and prospective study-abroad students.

Sincerely,

James F. Larson, Ph.D.
Deputy Director
Fulbright Commission
Seoul, Korea

The Korea Times and other local papers highlighted today’s government announcment that it intends to develop a new test that will hopefully replace much of the TOEFL exam volume in South Korea.  As announced by the Ministry of Education, Science and Technology, one purpose of the new test is to reduce the amount of money people spend on private cram schools and language institutes.  The new test, tentatively named the State English Aptitude Test, will be modeled on Japan’s EIKEN test, which has earned international recognition.  ”We believe, as long as we can develop a quality test, many overseas schools will accept it,” said Education Minister Ahn Byoung Man.   He further stated that he expects the new test to replace TOEIC and TOEFL in university admissions and job applications.  The government will run pilot tests between 2010 and 2011 before formally introducing the new test in 2012.

Reports in both the Korea Times and the Joongang Ilbo recently highlighted the continued growth of South Korea’s private institutes, otherwise known as cram schools.  According to the Ministry of Education, Science and Technology, the private education market was worth 20 trillion won last year. Some, however, estimate the market to be as big as 30 trillion won when including institutes for kids and adults. Many private institutes have turned into huge enterprises with nationwide franchises and are preparing to list on the stock market. Some of them are even planning to advance into other Asian markets. 

A number of global private equity funds have invested in the private education market over the last few years. Their investment is expected to hone its competitiveness but concerns are growing that public education at schools might be left behind. The investments show that private education is not about small private cram schools or “hagwon” under careless management anymore ― it has grown into a huge industry. 

The Carlyle Group, for example, invested $20 million in Topia Academy, a private institute specializing in English education; TStone invested 60 billion won in Time Holdings, a cram school; Elim Edu, an essay school, got a $13 million investment from Goldman Sachs; and AIG Investment put $60 million into Avalon, an English language institute.

President Lee Myung-bak administration’s focus on English education is also expected to bolster the private education market.

There was an interesting article in today’s Joongang Ilbo, English edition, about the effects of the announcement by the city of Seoul’s education authority that it would establish two new, all-English, international middle schools.   The article shows quite graphically the relationship between strategies in public education and the activities of private English and study abroad institutes.

As reported in the Joongang Ilbo, the Seoul Metropolitan Office of Education has announced a plan to establish two international middle schools in the capital city, each of which will accept 160 freshmen beginning next March.  Each school will accept 160 first-year students who will be divided into five classes. The annual tuition will be set at 4.8 million won ($4,574) or less, a measure partly aimed at quelling criticism that the new schools will be affordable only for children from rich families. But first-year students also have to pay an additional 700,000 won as an entrance fee. The Korean Teachers and Education Workers’ Union held a press conference in front of the education office yesterday to protest the decision.
“The change would put enormous burden on elementary school students and increase the financial burden on parents, eventually devastating the elementary education system,” said the union in a statement.